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Sirius Prays Howard Stern Pays

There's not much of a surprise in Sirius Satellite Radio's latest earnings release. Its subscriber count is up, and so is its loss. "SIRIUS Satellite Radio Reports Record Revenue for Third Quarter 2005" headlines the statement at Sirius' web site. Then there's the section about Martha Stewart and Howard Stern, but no mention of the costs they carry.

I've been consistent in doubting the Sirius formula. Mostly, this doubt stems from their constant hype accompanied by few details. Examples are in analyzing the company's Q2 2005 release and finding facts that aren't highlighted, or in asking how does one pay $100 million and $24 million a year to two top names when there is little to indicate the cost will be recouped.

Arguing 10% of Stern's fans will follow him to Sirius is flawed. I'll hold steady with predictions of 2-3%. At the high end, if 700,000 listeners (5.8%) make the jump that's still not enough to cover his price. And, while Martha is popular, she's also available on a number of television programs - overexposed is the word here.

Robert Walberg goes into a number of other reasons why Sirius is not as healthy as its publicity department wants you to believe. Read his words through the link below.

The only saving grace in the future is if Sirius figures out a way to run its business like the government runs the country. If that's the case, then a 6.5% increase in the amount of money lost is no big deal.

Related Article:
MSNBC MoneyCentral

Posted: 11:30 11/3/2005

From: Gordon Bell

The article suggests that 2-3% of Howard Stern's audience will follow hime to Sirius. This is an absurdly low estimate. The writer obviously does not understand the cult like following Mr. Stern enjoys with his audience.

I'm not a Stern fan, but I would be extremely suprised to see him pull less than 10% of his listeners to Sirius.

From: anonymous

What this author forgets is two things....
sterns audience was cut short pre 2004 presidental elections (hey was pushing for kerry) secondly... radio plainly stinks, and his show is a source of entertainment for america.... I fell more people will join upwards of 5 million over the next year... for one I'm joining to have a portable radio, that will offer enlight ment.

Secondly *MR. Robert Walberg is an idiot if he wants SIRIUS to be run like the government... they blow away too much money and complain like overpaid babies....

(*Publisher's Note: Mr. Walberg did not make this comment. It came from Ken Dardis.)

From: Anonymous

I think Howard Stern needs Sirius more than Sirius needs Howard. The price tag for Stern is absurd. What if the listeners don't follow, then what?

From: Anonymous

I subscribed as soon as I heard Howard was moving - and I never regret it. Your 2-3 percent estimate is off by double digits.

From: Jay Yarabek - Merritt Promotion Development Group, Inc.

Sirius' prayers will be answered triple fold. Thier 10% estimate is very conservative. The real surge will come in the second quarter of '06, when fans, who do not plan to purchase, will indeed belly up, pay full price to feed their fix.

All industry estimates are way, way off the mark. Stern alone will account for 3 million new subscribers, within the next 7 months. (nov '05 - May '05)

I will agree with the author, that Martha is over-exposed, and is not a drawing card, she is merely icing on the cake, so spouses of Stern Branded listeners will justify the purchase. Smart move by Mel to sign her, as well as keeping her out of XM's camp.

Stern/Sirius creates a monumentally important time and shift in consumer shopping behavior. This will be the beginning of an end to "Red Hot Radio" as a viable advertising medium. It a very exciting time for other advertising mediums, as radio industry ratings become wildly fragmented, and ad revenue drops, vreating skeptism among radio ad buyers, and allowing them tgo consider other forms, such as outdoor and print media.

The market will be fragmented all of 2006, and part of 2007, as rating books catch up to actual consumer listening behavior. It may take 10 years, until the radio and advertising industries own up to the collossal drawing card that Stern and his team really are.

From: Anonymous

Anyone who bets against Howard Stern is a fool.

This man is not only a proven innovator for the last 20+ years, but he's got something to prove thanks to his grand send-off from the Infinity "braintrust" (he says sarcastically) led by chief terrestrial radio-killer and Viacom-lacky Joel Hollander.

The loyal Howard Stern audience WILL follow him to the unencumbered world of Sirius and this move (by Sirius) will go down as the definitive decision that put satellite radio on the map...just like the AFL/NY Jets did when they signed Joe Namath.

Anyone who didn't buy Sirius stock when Howard announced his move was foolish; when they failed to buy when Mel Karmazin signed on is a friggin' idiot.

From: David Dean

The number 1 reason that people listen to Howard Stern........"is to hear what he's going to say next"....imagine that plus NO censorship. You just have to be there!

Don't underestimate what is about to take place.....a staunch core of America is about to leave a place of petty censorship....and "out-of-control" advertising.

This country is thirsty to drink of "untampered with" non-pabulum. The religious right has exerted way too much control on the advertising/media. Thinking folk have moved on...young folk .(always moving in liberal directions) have moved from Radio.....The establishment,of course, insists that there will be no substantive change...guess what...they are categorically wrong and will soon go the way of...typewriters, car roll down windows and gas at $1.25/gal.

From: Conner Peterson

Howard sucks. I was a longtime listener that got fed up with the constant waaaa waaaa waaaa. Howard promoted Butt bongo Fiesta, newyears eve pay per view, and his movie just like the move to sirius. The difference is you payed the money once and felt a little cheated, how many people will pay month after month before they say is that all there is.

From: Ray Shah

The ugly truth is that Howard had been losing audience way before the FCC crackdown/supposed conspiracy against him by Bush/religious right. Just go to any Howard related message board and you'll see the listener resentment. Contrary to his false claims, he has never been #1 in every market he's been on, Private Parts only made $41 million at the box office (after two years of incessant promotion). His actual successes never quite match his own hype. Here we are not talking about paying under $10 for a movie but a commitment of over $200. Also his name can be a turn-off factor for many potential Sirius buyers, especially outside the big cities.

From: Anonymous

You're not paying $200 for stern, you're paying it for better radio. A land free on 10 minute commercials, to what radio used to be...RADIO If you can't afford $10 a month than I feel sorry for you and suggest you quit smoking, gambling, or whatever other nasty habit you have and save up. This is the future of radio, whether it be xm or sirius that you decide on

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